EUR/USD Forecast August 21-25 2017

EUR/USD was pressured and slipped lower, but did not go far. Will it stay in range?. The upcoming week features Pthe PMIs, key German surveys and Draghi’s highly anticipated speech in Jackson Hole. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD.

EUR/USD daily chart with support and resistance lines on it. Click to enlarge:

German ZEW Economic Sentiment: Tuesday, 9:00. This 275-strong survey has dropped from the highs of 20.6 recorded in May and drifted down to 17.5 points in July. A small drop to 15.3 is predicted now. The all-European measure stood at 35.6 in July and 34.2 is on the cards now.

Draghi speaks in Germany: Wednesday, 7:00. Prior to departing for the US, the president of the ECB will be speaking in Germany. He will likely keep his powder dry ahead of the Jackson Hole speech, but he can also surprise by providing early hints.

Flash PMIs: Wednesday, 7:00 for France, 7:30 for Germany and 8:00 for the euro-zone. Markit’s final manufacturing PMI for France stood at 54.9 points, above the 50-point threshold that separates expansion from contraction. A small drop to 54.6 is expected. The services sector had a higher score of 56 points and 55.8 is on the cards for August. Germany, the largest economy in the euro-zone, had an upbeat manufacturing PMI of 58.1 points and a slide to 57.8 is predicted. Services were behind with 53.1 and here, a rise is on the cards:53.3 points. The euro-zone as a whole saw a manufacturing PMI of 56.6 and a services PMI of 55.4. Manufacturing is expected to slip to 56.3 while services carry expectations of remaining unchanged.

Consumer Confidence: Wednesday, 14:00. This official survey of around 2300 consumers disappointed in July by falling back to -2 points. The negative number reflects pessimism, albeit weaker than in the past. A repeat of -2 is forecast.

Belgian NBB Business Climate: Thursday, 13:00. Belgium’s wide survey serves as a gauge for the whole continent. The score is close to being balanced between improving and worsening conditions at 0 points but remains behind. The score was -1.5 in July. -1.6 is estimated for August.

German Final GDP: Friday, 6:00. The German economy enjoyed robust growth and served as a locomotive. The final read will likely confirm the previous one.

German Ifo Business Climate: Friday, 8:00. Germany’s leading Think-tank has published upbeat reports in recent months. The 7000-strong survey advanced to 116 points in July, the highest since the pre-crisis days. A similar score of 115.7 is predicted.

Draghi speaks at Jackson Hole: Friday 19:00. The announcement of Draghi’s speech in Jackson Hole already triggered high expectations. The president of the ECB used his 2014 speech in Wyoming to provide significant hints about the central bank’s QE announcement that followed in January 2015. This time, he is expected to hint about the beginning of the end of QE: an announcement of QE tapering to come in the Autumn and to begin in 2018. In the recent rate decision, Draghi stressed that there has been no discussion about tapering but his dovishness did not convince markets. Some expect him to play down expectations also now, in order to halt the rise of the euro. However, the recent strength of the common currency reflects the strength of the economy, and it will be hard for Draghi to change the course, even temporarily.

* All times are GMT

EUR/USD Technical Analysis

Euro/dollar started off the week with a slide under the 1.1870 level mentioned last week. It hit a low of 1.1660, but this was just temporary.

Technical lines from top to bottom:

1.2565 capped the pair back in late 2014. It is followed by 1.2240, another line from that time and 1.2170, quite close by.

1.2040 was the low point in 2012 and close to the round number of 1.20. It is followed by 1.1876, the trough in 2010, also seen in early August 2017.

1.17 is a round number that served as a cushion for the pair during the month of August. It replaces the 2015 high of 1.1712. 1.1620 was a swing high in May 2016.

1.1580 was a stepping stone for the pair on the way up in July 2017. It is followed by the round number of 1.15.

1.1445 is the June 2017 peak and immediate resistance. 1.1390 is the post-breakout low and works as support.

1.13 is the top line seen in November before the collapse. 1.1230 capped the pair in June.

I am bullish on EUR/USD

The euro has the backing of a strong economy, making the rise of the euro justified. Will Draghi try to fight it? Can he do that? The speeches at Jackson Hole will likely stress the advantage Europe currently has over the US and could boost the pair.

About Author

Yohay Elam – Founder, Writer and Editor
I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me.
Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.
Yohay's Google Profile

Comments are closed.

Top Brokers

About ForexCrunch

Forex Crunch is a site all about the foreign exchange market, which consists of news, opinions, daily and weekly forex analysis, technical analysis, tutorials, basics of the forex market, forex software posts, insights about the forex industry and whatever is related to Forex.

Disclaimer

Foreign exchange (Forex) trading carries a high level of risk and may not be suitable for all investors. The risk grows as the leverage is higher. Investment objectives, risk appetite and the trader's level of experience should be carefully weighed before entering the Forex market. There is always a possibility of losing some or all of your initial investment / deposit, so you should not invest money which you cannot afford to lose. The high risk that is involved with currency trading must be known to you. Please ask for advice from an independent financial advisor before entering this market. Any comments made on Forex Crunch or on other sites that have received permission to republish the content originating on Forex Crunch reflect the opinions of the individual authors and do not necessarily represent the opinions of any of Forex Crunch's authorized authors. Forex Crunch has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: Omissions and errors may occur. Any news, analysis, opinion, price quote or any other information contained on Forex Crunch and permitted re-published content should be taken as general market commentary. This is by no means investment advice. Forex Crunch will not accept liability for any damage, loss, including without limitation to, any profit or loss, which may either arise directly or indirectly from use of such information.